Do You Need To Update Your Estate Plan?

If you have a living trust, do you need assistance in reviewing whether you have properly transferred title to your assets to the living trust?

Do You Need To Update Your Estate Plan?

Have there been any significant changes in the lives of your appointed decision makers that would affect their ability to serve on your behalf?  Are there people you would like to have as decision makers who are not listed on your original estate plan documents?

Do You Need To Update Your Estate Plan?

Has your net worth changed significantly since you established or modified your estate plan?  Has your marital status changed?  Are you concerned about leaving an inheritance outright to a beneficiary?

Estate Tax Exclusion Portability

Before portability, each spouse was forced to use their lifetime exclusion either before or at the time of their death.  If the lifetime exclusion was not used, it was lost.  Now, with portability, the couple is not regulated to consuming the first spouse’s lifetime exclusion at the first spouse’s death.  Portability extends the time to both spouses’ exclusion until the survivor dies; that is a major advantage.

Portability Of The Unused Spousal Exclusion

There is no “one size fits all” estate planning tool.  Many planning tools work well for a majority of couples – some work well for many, others work well for only a few.  Portability of the estate tax exclusion is one of those planning tools that would work well for a great majority.

California’s Statute of Frauds

The statute of frauds is a collective term describing the various statutory provisions which render unenforceable certain types of contracts unless they are evidenced by a writing. The statute of frauds does not mean that oral agreements within the scope of the statute of frauds cannot be made and performed, or that they are illegal.  It merely means that enforcement may be unavailable if one of the parties refuses to fulfill their obligations.

Standard Agreements vs. Specific Agreements

Most businesses benefit from having some form of standard agreement drafted for them. Although each business should have an agreement customized to their own situation, the standard agreement should be flexible enough to cover most of their common customer transactions.

In contrast to the standard agreement a business may use with their customers, there are times when a business owner should have a specific agreement drafted for a specific transaction.  This would typically involve a unique or large transaction.  For example, if a business owner wants to acquire another company as a way of expanding the business, an acquisition agreement may need to be drawn up.  It is important that any transaction that requires significant negotiation is reduced to writing to help ensure that the deal is reached between the parties and is understood by all of them.

What Happens If You Don’t Formalize Your Plan

Having your preferences and documents in order will protect you and your estate from outside intervention.  If you don’t plan, the consequences could be one of the following:

  • If you become incapacitated without having appointed someone to handle your affairs, the court will appoint a conservator to act on your behalf.  There are two types of conservators and the same person can fill both roles.  There is the conservator of the person and the conservator of the estate.  Even if the court-appointed conservator is someone you trust to carry out your wishes, that person will still have to publically report to the court periodically and will likely incur the added expense of outside accountants and attorneys.  In some cases, the court could appoint a stranger to handle your affairs.
  • Probate is a process used to value your estate, settle debts, pay taxes and transfer assets to your heirs.  Trusts are not subject to probate but a will must be probated with certain exceptions.

Because a will is a public document, anyone can review its contents.  If someone feels that they have been treated unfairly, they can contest it.  Such challenges can tie up your assets for months or even years, and could cost your estate thousands of dollars in legal fees.  If you do not establish a trust and title your assets correctly, your estate could potentially undergo a costly, lengthy and public probate process.

Probate Attorney Fees in California

Lawyers charge a “statutory fee” which is an amount that is a percentage of the value of the gross assets that go through probate.  The current rate starts at 4% of the first $100,000 of gross value of the probate estate and that percentage decreases as the gross value of the estate goes up.  For example, if you have a gross estate value of $750,000, the attorney’s fees will be $18,000.  If there are extra services that need to be performed, for example, selling a house, additional fees can be ordered by the court.  Please note that this is the amount for just one fee.  If both the executor and the attorney take the statutory fees, this amount would be doubled.  Avoiding this process is one of the benefits of a living trust.

Basic Probate Process

If probate is necessary, someone must come forward to start the process.  If there is a will, the executor is named in the will.  If there is no will, then a family member would generally ask to be appointed as administrator.


The job of an executor will generally last from six months to a year assuming there are no disputes between beneficiaries.  There is a filing fee charged by the court of about $400 depending on the county.


Once the executor has the authority from the court, then the process of gathering the deceased person’s assets begins.  The executor needs to open an estate bank account, apply for a tax ID number, and set up a filing system.  The executor will need to compile and file with the court an inventory and appraisal of all probate property.


In California, creditors have four months to come forward with their claims.  When all of the bills and taxes have been paid, the executor then asks the court to close the estate.  That’s when the executor can distribute all of the estate assets to the people who inherit them.